Arrhythmia Research Technology Inc (HRT, Financial) filed Quarterly Report for the period ended 2009-07-29.
Arrhythmia Research Technology Inc. a Delaware corporation is engaged in the development of medical software which acquires data and analyzes electrical impulses of the heart to detect and aid in the treatment of potentially lethal arrhythmias. The Company\'s patented products consist of signal-averaging electrocardiographic (SAECG) software whose proprietary Windows based version is named the Predictor series. These systems and product lines have defined the industry and clinical standards for high resolution electrocardiography. The Company through its wholly owned subsidiary Micron Products Inc. manufactures silver plated and non-silver plated conductive resin sensors and distributes metal snaps used in the manufacture of disposable ECG EEG EMS and TENS. It operates primarily in the United States Canada Europe and the Pacific Rim and is based in Fitchburg Massachusetts. Arrhythmia Research Technology Inc has a market cap of $9.5 million; its shares were traded at around $3.55 with and P/S ratio of 0.4. Arrhythmia Research Technology Inc had an annual average earning growth of 25.2% over the past 10 years.
Revenue was $10,054,893 for the six months ended June 30, 2009 as compared to $11,885,862 for the same period in 2008, a decrease of 15% or $1,830,969. The revenue decrease associated with the discontinued unprofitable forging product totaled $1,477,981 in the six months ended June 30, 2009 as compared to the same period in 2008. During this same period, sales of Micron s medical sensors and snaps with silver surcharge decreased by $662,059, while the volume increased by 14%. High volume precision molded products and other miscellaneous sales decreased by $7,687. Revenue from the Micron Integrated Technology s (MIT) product life cycle management programs excluding the forging product increased by $365,901. The snap attaching machine business unit decreased $49,143 when compared to the same period in 2008. There were no sales of the Company s SAECG products in the first six months of 2009 or 2008.
Cost of sales was $4,496,306 or 83.7% for the three months ended June 30, 2009 as compared to $5,079,649 or 79% for the same period in 2009. Cost of sales was $8,235,447 or 81.9% for the six months ended June 30, 2009 as compared to $9,427,953 or 79.3% for the same period in 2008. Cost of manufacturing has been stabilized with the recent success of a company-wide cost reduction team. The reduction and stabilization of costs remains a priority of management efforts. The inability to increase our sensor prices in the competitive global marketplace hinders passing additional material and utility cost increases to our customers, excluding the escalating cost of silver. Management continues to investigate ways to improve the overall gross margin by elimination of low contribution products while expanding higher margin product lines. The investment in automated equipment is ongoing with the full benefit expected to begin the fourth quarter of 2009.
General and administrative expense was $512,391 or 9.6% of sales for the three months ended June 30, 2009 as compared to $779,084 or 12% of sales for the same period in 2008. General and administrative expense was $1,087,895 or 10.8% of sales for the six months ended June 30, 2009 as compared to $1,395,948 or 11.7% of sales for the same period in 2008. Included in the expense for the three months ended June 30, 2008 was a one time charge of $250,000 for costs associated with a terminated acquisition following due diligence. The 2009 general and administrative expense is expected to increase as the Section 404 of the Sarbanes-Oxley Act of 2002 compliance project is completed this year.
Research and development expense was $57,716 or 1.1% of sales for the three months ended June 30, 2009 as compared to $129,051 or 2.0% of sales for the same period in 2008. Research and development expense was $126,463 or 1.3% of sales for the six months ended June 30, 2009 as compared to $212,673 or 1.8% of sales in the same period in 2008. The proportion of expense related to ART s product, Predictor®7 was $7,393 and $11,649 for the three and six months ended June 30, 2009, compared to $19,320 and $40,041 for the same periods in 2008. Although base development work on Predictor 7 has been completed, costs were expended to support a National Institute of Health research project utilizing ART s proprietary Signal Averaged ECG products and patented algorithms. The remaining portion of the research and development expense is associated with continued work on process improvements to Micron sensor and snap product line and new processes in MIT. This work is expected to continue through the end of 2009.
Other expense, net was $5,377 for the three months ended June 30, 2009 as compared to $5,563 for the same period in 2008. Other expense, net was $19,210 for the six months ended June 30, 2009 as compared to $769 for the same period in 2008. Interest income in the six months ended June 30, 2009 was offset by a loss on disposal of assets of $8,904 and interest expense of $20,334 associated with an equipment note as compared to $23,772 interest expense in 2008.
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Arrhythmia Research Technology Inc. a Delaware corporation is engaged in the development of medical software which acquires data and analyzes electrical impulses of the heart to detect and aid in the treatment of potentially lethal arrhythmias. The Company\'s patented products consist of signal-averaging electrocardiographic (SAECG) software whose proprietary Windows based version is named the Predictor series. These systems and product lines have defined the industry and clinical standards for high resolution electrocardiography. The Company through its wholly owned subsidiary Micron Products Inc. manufactures silver plated and non-silver plated conductive resin sensors and distributes metal snaps used in the manufacture of disposable ECG EEG EMS and TENS. It operates primarily in the United States Canada Europe and the Pacific Rim and is based in Fitchburg Massachusetts. Arrhythmia Research Technology Inc has a market cap of $9.5 million; its shares were traded at around $3.55 with and P/S ratio of 0.4. Arrhythmia Research Technology Inc had an annual average earning growth of 25.2% over the past 10 years.
Highlight of Business Operations:
Revenue was $5,371,439 for the three months ended June 30, 2009 as compared to $6,426,120 for the same period in 2008, a decrease of 16% or $1,054,681. Revenues associated with the discontinued unprofitable forging product totaled $1,025,836 in the three months ended June 30, 2008. Sales of Micron s medical sensors and snaps with silver surcharge decreased by $440,695, while the volume increased by 7%. Management will continue to focus on the protection and growth of sensor market share. Other miscellaneous sales increased by $41,274. Revenue from the Micron Integrated Technology s (MIT) other product life cycle management programs increased $370,576. The MIT division in Micron Products includes the custom manufacturing and product life cycle businesses. This division s revenue is derived from the custom molding, precision metal machining and mold making activities.Revenue was $10,054,893 for the six months ended June 30, 2009 as compared to $11,885,862 for the same period in 2008, a decrease of 15% or $1,830,969. The revenue decrease associated with the discontinued unprofitable forging product totaled $1,477,981 in the six months ended June 30, 2009 as compared to the same period in 2008. During this same period, sales of Micron s medical sensors and snaps with silver surcharge decreased by $662,059, while the volume increased by 14%. High volume precision molded products and other miscellaneous sales decreased by $7,687. Revenue from the Micron Integrated Technology s (MIT) product life cycle management programs excluding the forging product increased by $365,901. The snap attaching machine business unit decreased $49,143 when compared to the same period in 2008. There were no sales of the Company s SAECG products in the first six months of 2009 or 2008.
Cost of sales was $4,496,306 or 83.7% for the three months ended June 30, 2009 as compared to $5,079,649 or 79% for the same period in 2009. Cost of sales was $8,235,447 or 81.9% for the six months ended June 30, 2009 as compared to $9,427,953 or 79.3% for the same period in 2008. Cost of manufacturing has been stabilized with the recent success of a company-wide cost reduction team. The reduction and stabilization of costs remains a priority of management efforts. The inability to increase our sensor prices in the competitive global marketplace hinders passing additional material and utility cost increases to our customers, excluding the escalating cost of silver. Management continues to investigate ways to improve the overall gross margin by elimination of low contribution products while expanding higher margin product lines. The investment in automated equipment is ongoing with the full benefit expected to begin the fourth quarter of 2009.
General and administrative expense was $512,391 or 9.6% of sales for the three months ended June 30, 2009 as compared to $779,084 or 12% of sales for the same period in 2008. General and administrative expense was $1,087,895 or 10.8% of sales for the six months ended June 30, 2009 as compared to $1,395,948 or 11.7% of sales for the same period in 2008. Included in the expense for the three months ended June 30, 2008 was a one time charge of $250,000 for costs associated with a terminated acquisition following due diligence. The 2009 general and administrative expense is expected to increase as the Section 404 of the Sarbanes-Oxley Act of 2002 compliance project is completed this year.
Research and development expense was $57,716 or 1.1% of sales for the three months ended June 30, 2009 as compared to $129,051 or 2.0% of sales for the same period in 2008. Research and development expense was $126,463 or 1.3% of sales for the six months ended June 30, 2009 as compared to $212,673 or 1.8% of sales in the same period in 2008. The proportion of expense related to ART s product, Predictor®7 was $7,393 and $11,649 for the three and six months ended June 30, 2009, compared to $19,320 and $40,041 for the same periods in 2008. Although base development work on Predictor 7 has been completed, costs were expended to support a National Institute of Health research project utilizing ART s proprietary Signal Averaged ECG products and patented algorithms. The remaining portion of the research and development expense is associated with continued work on process improvements to Micron sensor and snap product line and new processes in MIT. This work is expected to continue through the end of 2009.
Other expense, net was $5,377 for the three months ended June 30, 2009 as compared to $5,563 for the same period in 2008. Other expense, net was $19,210 for the six months ended June 30, 2009 as compared to $769 for the same period in 2008. Interest income in the six months ended June 30, 2009 was offset by a loss on disposal of assets of $8,904 and interest expense of $20,334 associated with an equipment note as compared to $23,772 interest expense in 2008.
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